Saia, Inc. (NASDAQ:SAIA) Q2 2023 Earnings Conference Call July 28, 2023 11:00 AM ET Company Participants Doug Col - EVP & CFO Fritz Holzgrefe - President & CEO Conference Call Participants Jack Atkins - Stephens Amit Mehrotra - Deutsche Bank Chris Wetherbee - Citigroup Thomas Wadewitz - UBS James Mulligan - Wells Fargo Jordan Alliger - Goldman Sachs Ken Hoexter - Bank of America Jonathan Chappell - Everycore ISI Eric Morgan - Barclays Jason Seidl - TD Cowen Ravi Shanker - Morgan Stanley Bascome Majors - Sus ...

PART I. FINANCIAL INFORMATION [ITEM 1: Financial Statements](index=3&type=section&id=ITEM%201%3A%20Financial%20Statements) The Q2 and six-month financial statements for June 30, 2023, show decreased operating revenue and net income, increased assets and equity, and improved operating cash flow, with notes detailing accounting policies and debt [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $2.337 billion at June 30, 2023, driven by higher cash and property, while liabilities slightly decreased and stockholders' equity rose | Metric | June 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change | | :-------------------------------- | :--------------------------- | :-------------------------- | :----- | | Total Assets | $2,337,111 | $2,174,710 | +$162,401 | | Cash and cash equivalents | $234,997 | $187,390 | +$47,607 | | Net property and equipment | $1,607,553 | $1,482,620 | +$124,933 | | Total Liabilities | $590,889 | $595,369 | -$4,480 | | Total Stockholders' Equity | $1,746,222 | $1,579,341 | +$166,881 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2023 saw a 6.8% YoY decrease in operating revenue, leading to a 17.6% drop in operating income and a 16.4% decline in net income, with similar trends for the six-month period | Metric | Q2 2023 (in thousands) | Q2 2022 (in thousands) | Change (%) | 6M 2023 (in thousands) | 6M 2022 (in thousands) | Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :--------- | :--------------------- | :--------------------- | :--------- | | Operating Revenue | $694,622 | $745,554 | (6.8)% | $1,355,157 | $1,406,770 | (3.7)% | | Operating Income | $120,255 | $145,993 | (17.6)% | $219,398 | $249,442 | (12.0)% | | Net Income | $91,319 | $109,245 | (16.4)% | $167,416 | $188,669 | (11.2)% | | Diluted Earnings Per Share | $3.42 | $4.10 | (16.7)% | $6.27 | $7.08 | (11.5)% | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased to $1.746 billion by June 30, 2023, primarily due to net income for the periods, with stock compensation also contributing | Metric | Dec 31, 2022 (in thousands) | Mar 31, 2023 (in thousands) | Jun 30, 2023 (in thousands) | | :--------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Stockholders' Equity | $1,579,341 | $1,650,940 | $1,746,222 | | Net Income (Q1 2023) | N/A | $76,097 | N/A | | Net Income (Q2 2023) | N/A | N/A | $91,319 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly increased to $291.4 million for the six months ended June 30, 2023, while investing activities used more cash due to higher capital expenditures | Metric | 6M 2023 (in thousands) | 6M 2022 (in thousands) | Change | | :-------------------------------- | :--------------------- | :--------------------- | :----- | | Net cash provided by operating activities | $291,405 | $207,905 | +$83,500 | | Net cash used in investing activities | $(226,493) | $(155,291) | -$(71,202) | | Net cash used in financing activities | $(17,305) | $(21,331) | +$4,026 | | Net Increase in Cash and Cash Equivalents | $47,607 | $31,283 | +$16,324 | | Cash and Cash Equivalents, end of period | $234,997 | $137,871 | +$97,126 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential context and detail for the condensed consolidated financial statements, covering significant accounting policies, earnings per share, commitments, fair value measurements, and debt arrangements [Summary of Significant Accounting Policies](index=8&type=section&id=(1)%20Summary%20of%20Significant%20Accounting%20Policies) The company primarily provides national less-than-truckload (LTL) services, accounting for over 97% of its revenue, with revenue recognized over shipment transit time - Saia, Inc. primarily offers national less-than-truckload (LTL) services, accounting for over **97% of its revenue**, and also provides non-asset truckload, expedited transportation, and logistics services[23](index=23&type=chunk) - Revenue is recognized over the transit time of shipments (1-5 days) as performance obligations are satisfied, with billing typically occurring after service completion[25](index=25&type=chunk) [Computation of Earnings Per Share](index=9&type=section&id=(2)%20Computation%20of%20Earnings%20Per%20Share) Basic EPS for Q2 2023 was $3.43 and diluted EPS was $3.42, both lower than Q2 2022, with similar declines for the six-month period | Metric | Q2 2023 | Q2 2022 | 6M 2023 | 6M 2022 | | :--------------------------- | :------ | :------ | :------ | :------ | | Basic Earnings Per Share | $3.43 | $4.12 | $6.29 | $7.12 | | Diluted Earnings Per Share | $3.42 | $4.10 | $6.27 | $7.08 | - Options and restricted stock for **14,854 shares** (Q2 2023) and **38,437 shares** (Q2 2022) were excluded from diluted EPS calculations due to their anti-dilutive effect[28](index=28&type=chunk) [Commitments and Contingencies](index=9&type=section&id=(3)%20Commitments%20and%20Contingencies) Management believes adequate provisions have been made for legal contingencies, expecting no material adverse effect on financial condition, though operating results could be affected - Management believes adequate provisions have been made for legal contingencies, claims, and pending litigation, expecting no material adverse effect on financial condition, but acknowledging potential impact on quarterly or annual operating results[29](index=29&type=chunk) [Fair Value of Financial Instruments](index=9&type=section&id=(4)%20Fair%20Value%20of%20Financial%20Instruments) The estimated fair value of total debt at June 30, 2023, was $21.5 million, closely aligning with its carrying value of $21.4 million | Metric | June 30, 2023 (in millions) | Dec 31, 2022 (in millions) | | :--------------------------- | :-------------------------- | :-------------------------- | | Estimated Fair Value of Total Debt | $21.5 | $31.2 | | Carrying Value of Total Debt | $21.4 | $31.0 | [Debt and Financing Arrangements](index=10&type=section&id=(5)%20Debt%20and%20Financing%20Arrangements) Total debt, primarily finance leases, decreased to $21.4 million at June 30, 2023, and the company entered a new unsecured $300 million credit agreement with no outstanding borrowings | Metric | June 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change | | :--------------------------- | :--------------------------- | :-------------------------- | :----- | | Total Debt | $21,358 | $31,008 | -$9,650 | | Long-term debt, less current portion | $9,677 | $16,489 | -$6,812 | - On February 3, 2023, the Company entered into a new unsecured credit agreement for **$300 million**, extending the term to February 2028 and increasing the accordion feature to **$150 million**, replacing the previous secured agreement[33](index=33&type=chunk) - As of June 30, 2023, the Company had no outstanding borrowings under its credit agreements but had **$33.1 million** in outstanding letters of credit[34](index=34&type=chunk) [Credit Agreement](index=10&type=section&id=Credit%20Agreement) The company replaced its secured $300 million credit agreement with a new unsecured one in February 2023, extending the term to 2028 and increasing the accordion feature to $150 million, with no outstanding borrowings at June 30, 2023 - The 2023 Credit Agreement provides a **$300 million** revolving line of credit, extends

Saia, Inc. (NASDAQ:SAIA) Q1 2023 Earnings Conference Call April 28, 2023 11:00 AM ET Company Participants Doug Col - EVP & CFO Fritz Holzgrefe - President & CEO Conference Call Participants Jack Atkins - Stephens Jason Seidl - TD Cowen Jonathan Chappell - Evercore ISI Amit Mehrotra - Deutsche Bank Chris Wetherbee - Citigroup Scott Group - Wolfe Research Thomas Wadewitz - UBS Allison Poliniak - Wells Fargo Bascome Majors - Susquehanna. Ken Hoexter - Bank of America Ravi Shanker - Morgan Stanley Christopher K ...

Financial Performance - Operating revenue for Q1 2023 was $660,535, a slight decrease of 0.1% from $661,216 in Q1 2022[12] - Net income for Q1 2023 was $76,097, down 4.4% from $79,424 in Q1 2022[12] - Operating expenses for Q1 2023 totaled $561,392, an increase of 0.6% compared to $557,767 in Q1 2022[12] - Basic earnings per share for Q1 2023 were $2.86, down from $3.01 in Q1 2022, a decrease of 5.0%[12] - Consolidated operating income for Q1 2023 was $99.1 million, down from $103.4 million in Q1 2022[44] - Diluted earnings per share were $2.85 in Q1 2023, compared to $2.98 in the prior year quarter[44] - The operating ratio was 85.0% in Q1 2023, compared to 84.4% in Q1 2022[44] Assets and Liabilities - Total current assets decreased to $513,514 in Q1 2023 from $530,886 in Q4 2022, a decline of 3.5%[10] - Cash and cash equivalents at the end of Q1 2023 were $166,425, down 11.1% from $187,390 at the end of Q4 2022[16] - Total liabilities increased slightly to $591,859 in Q1 2023 from $595,369 in Q4 2022, reflecting a decrease of 0.3%[10] - Total stockholders' equity increased to $1,650,940 in Q1 2023 from $1,579,341 in Q4 2022, reflecting a growth of 4.5%[10] - The estimated fair value of total debt was $26.7 million as of March 31, 2023, down from $31.2 million as of December 31, 2022[29] - Total debt as of March 31, 2023 was $26.5 million, a decrease from $31.0 million as of December 31, 2022[30] Cash Flow and Investments - The company reported a net cash provided by operating activities of $119,270 for Q1 2023, an increase of 24.2% from $95,961 in Q1 2022[16] - Net cash used in investing activities was $128.1 million in Q1 2023, significantly higher than $45.4 million in Q1 2022, due to increased capital expenditures[65] - The Company invested $128,415 in property and equipment during Q1 2023, significantly higher than $46,259 in Q1 2022[16] - The Company plans to exceed $400 million in net capital expenditures for 2023, with $128.1 million already spent in the first three months[67] Operational Metrics - LTL shipments decreased by 7.1% and LTL tonnage decreased by 5.5% compared to the prior year quarter[44] - LTL tonnage decreased by 5.5% to 1.3 million tons, while LTL shipments fell by 7.1% to 1.8 million shipments in Q1 2023[53] - Revenue per shipment increased by 7.6% to $354.37 in Q1 2023, attributed to changes in business mix and pricing actions[53] - Working capital increased to $243.0 million as of March 31, 2023, up from $171.5 million a year earlier[63] Credit and Financing - The Company entered into a new unsecured credit agreement maintaining a line of credit of $300 million, extending the term until February 2028, with a total borrowing capacity of up to $450 million[69] - As of March 31, 2023, the Company had $268.8 million available under the 2023 Credit Agreement for general corporate purposes[70] - The Company had outstanding letters of credit of $31.2 million under credit agreements as of March 31, 2023[34] - The Company had outstanding letters of credit of $33.0 million and surety bonds of $55.8 million as of March 31, 2023[73] Tax and Compliance - The effective tax rate for Q1 2023 was 23.2%, up from 22.5% in Q1 2022, primarily due to stock compensation activity[57] - The Company accrued approximately $4.1 million for uncertain tax positions and $93.5 million for claims and insurance liabilities as of March 31, 2023[74] - There were no material changes to the risk factors identified in the Annual Report for the year ended December 31, 2022[89] - The report is signed on behalf of the registrant in compliance with the Securities Exchange Act of 1934[95] Management and Reporting - Douglas L. Col serves as the Executive Vice President and Chief Financial Officer of Saia, Inc.[96] - The date of the report is April 28, 2023[97]

Expansion and Growth - The company opened 18 new terminals from 2017 to 2022, including 11 in 2022, and plans to open five more in early 2023[87]. - The company has opened 11 new terminals in 2022, indicating a strategy of geographic expansion[87]. - The company plans to continue geographic and terminal expansion, alongside targeted marketing initiatives to enhance revenue growth[199][201]. Financial Performance - The Company's operating revenue increased by 22.0% in 2022 to $2.8 billion, driven by pricing actions, including a 7.5% general rate increase implemented on January 24, 2022[180][192]. - Consolidated operating income rose to $470.5 million in 2022, up from $335.1 million in 2021, primarily due to pricing actions and fuel margin improvements[181][195]. - The Company generated $473.0 million in net cash from operating activities in 2022, compared to $382.6 million in 2021[182][198]. - Working capital increased to $256.8 million as of December 31, 2022, from $94.9 million in 2021, mainly due to higher cash and cash equivalents[198]. - LTL revenue per hundredweight increased by 19.4% to $24.70 in 2022, while LTL revenue per shipment rose by 21.5% to $351.27[192][191]. - The operating ratio improved to 83.1% in 2022, compared to 85.4% in 2021, indicating better cost management relative to revenue[195]. - Net income for 2022 was $357.4 million, a significant increase of 41.2% compared to $253.2 million in 2021[250]. - Basic earnings per share for 2022 rose to $13.48, up from $9.62 in 2021, marking an increase of 40.0%[250]. - The effective income tax rate was 23.6% for 2022, slightly down from 23.9% in 2021[197]. Operating Expenses and Costs - The company's operating expenses for 2022 totaled $2,321.6 million, an increase of 18.8% from $1,953.6 million in 2021[249]. - Salaries, wages, and employee benefits increased by $105.8 million in 2022, largely due to a 4.3% salary increase implemented in July 2022[196][201]. - Fuel surcharge revenue accounted for 19.9% of operating revenue in 2022, up from 14.0% in 2021, reflecting increased diesel fuel costs[194]. - The company faces potential increases in operating expenses due to emissions-control regulations affecting tractor engines, which may lead to higher fuel and maintenance costs[119]. - Higher costs and limited availability of suitable real estate have adversely affected business operations, increasing operating expenses and restricting market expansion[95]. Competition and Labor - The company faces significant competition for qualified drivers, leading to challenges in hiring and potential upward pressure on wages[76]. - The company has experienced a significant shortfall of qualified drivers, affecting its ability to meet customer demands[77]. - The company maintains a non-union workforce, which is crucial for its competitive position, but faces risks of potential unionization in new territories[93]. - The company has faced challenges related to labor availability, inflationary pressures, and supply chain disruptions[176]. Regulatory and Compliance Risks - The company is subject to risks from economic conditions, including inflation and global instability, which could adversely affect financial performance[72]. - The company is vulnerable to the increasing impact of climate change, which could disrupt operations and increase costs due to severe weather events[101]. - Compliance with various federal and state regulations, including those related to emissions and safety, could significantly impair equipment productivity and increase operational costs[123]. - The company is exposed to risks from new data privacy laws, which may increase compliance costs and create regulatory risks[128]. - Environmental regulations could lead to substantial fines or liabilities, adversely affecting the company's financial condition and operations[129]. Capital Expenditures and Investments - The company's net capital expenditures for 2022 were approximately $365.5 million, with anticipated expenditures in 2023 exceeding $400 million[105]. - Projected net capital expenditures for 2023 are expected to exceed $400 million, compared to $365.5 million in 2022, focusing on revenue equipment and technology investments[210]. - Total capital expenditures for 2022 amounted to $365.5 million, with significant investments in land and structures totaling $163.5 million[211]. - The acquisition of property and equipment in 2022 was $367,429, an increase of 28.6% from $285,746 in 2021[255]. Assets and Liabilities - The company's total assets increased to $2,174.7 million in 2022, up from $1,845.3 million in 2021, reflecting a growth of approximately 17.8%[248]. - Total current liabilities decreased to $274.1 million in 2022 from $321.3 million in 2021, a reduction of approximately 14.7%[248]. - The company's retained earnings increased to $1,307.2 million in 2022, up from $949.8 million in 2021, reflecting a growth of 37.7%[248]. - The company accrued approximately $3.9 million for uncertain tax positions as of December 31, 2022[215]. - The company had outstanding letters of credit of $33.0 million and surety bonds of $73.7 million as of December 31, 2022[214]. Legal and Litigation Risks - The company may face litigation risks that could disrupt operations and lead to significant expenses[117]. - The company is subject to legal proceedings that may not materially affect its financial condition but could impact results of operations in specific periods[156][157]. Technology and Cybersecurity - The company has invested in technology security initiatives to mitigate risks from cybersecurity threats[88]. - Saia's strategy includes expanding service geography and enhancing technology to improve operational efficiency[176].

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by $38.6 million to $655.7 million, with a year-over-year revenue growth of 6.3% [22][26] - Operating ratio increased by 170 basis points to 85.9%, compared to 84.2% a year ago [26][41] - Diluted earnings per share were $2.65, down from $2.76 in the fourth quarter of the previous year [26] Business Line Data and Key Metrics Changes - Yield excluding fuel surcharge improved by 6.5%, while yield including fuel surcharge increased by 14.3% [22][57] - Revenue per shipment excluding fuel surcharge rose by 7.1% to $288.34, and including fuel surcharge, it increased by 15% to $364.44 [23][57] - Tonnage decreased by 7.7%, attributed to an 8.2% decline in shipments, slightly offset by a 0.5% increase in average weight per shipment [23][57] Market Data and Key Metrics Changes - Shipments in December were down 12.3%, and tonnage was down 13.2%, with weight per shipment turning negative [24] - January shipments were down 3.9%, and tonnage was down 3.7%, with a slight increase in weight per shipment [24] Company Strategy and Development Direction - The company plans to open five terminals over the next three to four months to expand service and presence [9][30] - The focus remains on maintaining customer service and optimizing labor costs to match service delivery needs [33][34] - The company is working through a pipeline of more than 30 real estate projects for potential openings in the coming years [30] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment is influenced by weather disruptions and economic conditions, with expectations for a gradual recovery in volumes [29][47] - The company remains optimistic about the future, despite a tempered environment, and is focused on maintaining service levels and cost optimization [47][56] - Management indicated that pricing remains stable, with a contractual renewal increase of 7.4% in the fourth quarter [53][41] Other Important Information - Total operating expenses increased by 8.3% in the quarter, with fuel expenses rising by 41.5% due to higher diesel prices [25][26] - The company experienced a 5.3% increase in salaries, wages, and benefits, driven by wage increases and a growing employee count [46] Q&A Session Summary Question: Can you provide insights on January trends and staffing management? - Management indicated a historical step-up in shipments from December to January, with a 5.5% to 6% increase this year, and emphasized the importance of managing labor costs to match service delivery needs [13][32] Question: What are the expectations for margin improvement in 2023? - Management stated that margin improvement will depend on economic conditions and volume trends, with historical examples showing potential for margin improvement even in down years [16][17] Question: How is the company managing cost inflation? - Management noted that wage inflation is expected to remain around 4.3%, with depreciation costs also increasing due to ongoing investments [38][40] Question: What is the outlook for pricing in the current environment? - Management expressed confidence in maintaining pricing power due to strong service performance, despite a softer volume environment [116][117] Question: How does the company view the industrial and retail customer outlook? - Management noted that trends have been consistent across both sectors, with no significant differences observed in customer behavior [94][95]

Financial Performance - Operating revenue for Q3 2022 was $729,561,000, a 18.4% increase from $616,216,000 in Q3 2021[11] - Net income for Q3 2022 reached $97,891,000, up 22.8% from $79,709,000 in Q3 2021[11] - Operating income for the nine months ended September 30, 2022, was $377,797,000, a 58.9% increase from $237,756,000 in the same period of 2021[11] - Basic earnings per share for Q3 2022 were $3.69, compared to $3.03 in Q3 2021, representing a 21.8% increase[11] - Consolidated operating income for Q3 2022 was $128.4 million, up from $106.1 million in Q3 2021[49] - Diluted earnings per share for Q3 2022 were $3.67, compared to $2.98 in the prior year quarter, reflecting a significant increase[49] - Net income for the nine months ended September 30, 2022, was $286,560, compared to $179,474 for the same period in 2021, representing a 59.8% increase[18] Assets and Liabilities - Total assets increased to $2,140,324,000 as of September 30, 2022, compared to $1,845,250,000 at December 31, 2021, reflecting a growth of 16.0%[9] - Total stockholders' equity rose to $1,506,482,000 at September 30, 2022, up from $1,220,333,000 at December 31, 2021, marking a 23.5% increase[9] - Current assets totaled $551,402,000 as of September 30, 2022, up from $416,255,000 at December 31, 2021, indicating a 32.4% increase[9] - The estimated fair value of total debt was $34.8 million as of September 30, 2022, down from $50.8 million at December 31, 2021[35] - Total liabilities recognized under finance leases were $34.9 million as of September 30, 2022, down from $50.4 million at December 31, 2021[40] - The Company had outstanding letters of credit of $31.2 million under the Amended Credit Agreement as of September 30, 2022, compared to $29.3 million at December 31, 2021[39] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2022, was $344,074, up from $267,686 in 2021, indicating a 28.5% growth[18] - Cash and cash equivalents increased to $149,825,000 as of September 30, 2022, from $106,588,000 at December 31, 2021, reflecting a growth of 40.5%[9] - Net cash used in investing activities was $278.0 million for the nine months ended September 30, 2022, compared to $148.9 million in the same period last year, reflecting increased capital expenditures[69] - The company invested $279,057 in property and equipment during the nine months ended September 30, 2022, compared to $154,884 in 2021, reflecting an increase of 80.4%[18] Revenue Drivers - The Company's LTL revenue per shipment increased by 20.1% to $359.04 in Q3 2022, while LTL tonnage per workday decreased by 0.4% to 1.4 million tons[57] - Fuel surcharge revenue as a percentage of operating revenue increased to 20.5% in Q3 2022, compared to 13.9% in Q3 2021, due to rising fuel costs[58] - The Company’s customer base is diversified across numerous industries, with over 96% of revenue derived from transporting less-than-truckload (LTL) shipments across 45 states[24] Operational Efficiency - The operating ratio improved to 82.4% in Q3 2022 from 82.8% in Q3 2021, attributed to pricing initiatives, cost control, and operational efficiencies[49] - Total operating expenses for Q3 2022 were $601,206,000, an increase of 18.0% from $510,099,000 in Q3 2021[11] - The company reported a 10.5% increase in salaries, wages, and employee benefits, totaling $297,247,000 in Q3 2022 compared to $277,087,000 in Q3 2021[11] Tax and Legal Matters - The effective tax rate for Q3 2022 was 23.3%, down from 24.3% in Q3 2021, primarily due to tax credits related to alternative fuels[65] - The Company is subject to legal proceedings that may not materially affect its financial condition but could impact results of operations in specific periods[34] Risk Management - The Company is exposed to market risks including interest rates and fuel prices, with a fuel surcharge program in place to mitigate fuel price volatility[84] - Ongoing insurance and claims expenses could significantly reduce and cause volatility in the Company's earnings[97] - The Company may face significant liabilities for claims not covered by insurance, adversely affecting its financial condition and liquidity[103]

Saia, Inc. (NASDAQ:SAIA) Q3 2022 Earnings Call Transcript Q3 2022 Earnings Conference Call November 1, 2022 8:00 AM ET Company Participants Doug Col - Executive Vice President & Chief Financial Officer Fritz Holzgrefe - President & Chief Executive Officer Conference Call Participants Jon Chappell - Evercore ISI Jack Atkins - Stephens Ken Hoexter - Bank of America Jason Seidl - Cowen Scott Group - Wolfe Research Chris Wetherbee - Citi Amit Mehrotra - Deutsche Bank Todd Fowler - KeyBanc Capital Markets James ...

Saia, Inc. (NASDAQ:SAIA) Q2 2022 Earnings Conference Call July 27, 2022 11:00 AM ET Company Participants Doug Col - Executive Vice President & Chief Financial Officer Fritz Holzgrefe - President & Chief Executive Officer Conference Call Participants Scott Group - Wolfe Research Ravi Shanker - Morgan Stanley Todd Fowler - KeyBanc Capital Markets Amit Mehrotra - Deutsche Bank Bascome Majors - Susquehanna Ken Hoexter - Bank of America Jon Chappell - Evercore ISI Tom Wadewitz - UBS Tyler Brown - Raymond James J ...

Financial Performance - Operating revenue for Q2 2022 was $745.6 million, a 30.5% increase from $571.3 million in Q2 2021[12] - Net income for Q2 2022 reached $109.2 million, up 74.7% from $62.5 million in Q2 2021[12] - Operating income for the first six months of 2022 was $249.4 million, a 89.5% increase from $131.6 million in the same period of 2021[12] - Basic earnings per share for Q2 2022 were $4.12, compared to $2.37 in Q2 2021, representing a 73.8% increase[12] - Net income for the six months ended June 30, 2022, was $188,669,000, a 89% increase from $99,765,000 in the same period of 2021[17] - Basic earnings per share for the six months ended June 30, 2022, was $7.12, compared to $3.79 for the same period in 2021, marking an 88% increase[30] - Diluted earnings per share for the six months ended June 30, 2022, was $7.08, up from $3.74 in 2021, indicating an increase of 89%[30] - Consolidated operating income for Q2 2022 was $146.0 million, a 76.1% increase from $82.9 million in Q2 2021[47] - Net income for Q2 2022 was $109.2 million, or $4.10 per diluted share, compared to $62.5 million, or $2.34 per diluted share, in Q2 2021[64] Assets and Liabilities - Total assets as of June 30, 2022, were $2.05 billion, compared to $1.85 billion at the end of 2021, reflecting an 11% increase[9] - Total current liabilities increased to $339.1 million as of June 30, 2022, from $321.3 million at the end of 2021, a 5.4% rise[9] - Retained earnings as of June 30, 2022, were $1.14 billion, up from $949.8 million at the end of 2021, indicating a 19.9% increase[9] - The company reported a total stockholders' equity of $1.40 billion as of June 30, 2022, compared to $1.22 billion at the end of 2021, reflecting a 14.8% increase[9] - Total debt as of June 30, 2022, was $39,295,000, down from $50,404,000 at December 31, 2021, indicating a reduction of 22%[34] Cash Flow and Investments - Net cash provided by operating activities increased to $207,905,000 for the six months ended June 30, 2022, compared to $140,140,000 in 2021, reflecting a 48% growth[17] - Cash and cash equivalents increased to $137.9 million as of June 30, 2022, from $106.6 million at the end of 2021, a 29.3% increase[9] - Cash and cash equivalents at the end of the period rose to $137,871,000, up from $52,860,000 at the end of June 30, 2021, representing a 160% increase[17] - Net cash used in investing activities was $(155,291,000) for the six months ended June 30, 2022, compared to $(99,966,000) in 2021, reflecting a 55% increase in investment outflows[17] - Net capital expenditures for the first six months of 2022 were $155.3 million, with approximately $206.3 million of the remaining capital budget committed as of June 30, 2022[78] Operational Metrics - LTL shipments increased by 1.8% per workday, while LTL tonnage rose by 2.8% per workday compared to the prior year[47] - The operating ratio improved to 80.4% in Q2 2022 from 85.5% in Q2 2021, reflecting better pricing initiatives and cost control[47] - LTL revenue per shipment rose 27.6% to $353.75, with tonnage up 2.8% per workday to 1.4 million tons[55] - Fuel surcharge revenue as a percentage of operating revenue increased to 21.7% in Q2 2022 from 14.4% in Q2 2021 due to rising fuel costs[56] Future Projections and Capital Expenditures - The company expects net capital expenditures in 2022 to exceed $500 million, driven by real estate acquisitions and network expansion[66] - Projected net capital expenditures for 2022 are expected to exceed $500 million, an increase from $277.3 million in 2021[77] Insurance and Liabilities - The Company has accrued approximately $112.7 million for claims and insurance liabilities as of June 30, 2022[81] - The Company is required to pay additional amounts of up to $11.5 million if losses paid by the insurer exceed $18.4 million over the four-year policy period ending March 1, 2023[75] - The financial condition and liquidity of the Company could be adversely affected by significant claims not covered by insurance[101] - Insurance companies may require collateral in the form of letters of credit, which could reduce capital available for future growth[102] Stock and Shareholder Activities - The Company purchased a total of 3,140 shares of its stock during the period from April 1, 2022, to June 30, 2022[103] - The average price paid for shares purchased in June 2022 was $191.24[104]